| Overview:
Latvia currently faces a number of
difficult issues, including high unemployment, lack of English skills, and
inadequate education to meet current needs in the IT sector. In
addition, there is not a coordinated, strategic plan for investments in
education, and the implementation of the current plans has fallen short of
expectations. A law currently being reviewed by the Latvian
Parliament is not being viewed positively by businesses looking to invest
in Latvia, but lobbying efforts are taking place to produce a more
pro-business labor law. |
Human
resources is one of the main factors for the IT, telecommunications and
electronics industry in Latvia. In general, people like to work in electronics
and software development (because of the higher social status, better salaries
and greater career opportunities)2. There is a positive strong
heritage coming from the Soviet times, when Latvia’s main export was
electronics. The current and future problem is the shortage in the amount of
skilled people available in the market for further development and for different
business functions, for example international marketing.2
The
Foreign Investors’ Council (FICIL) addressed the need for a more coordinated
plan and investments in education in order to satisfy the actual and future
growing needs of the industries3. The government has recently been
increasing the financing of IT education programs at the Latvian University and
the Technical University in response to the demands from the market2.
But in general, there is very little cooperation between universities and either
the government or the private sector2. There is a general concern
among the industry about the future of the education in Latvia: salaries in
universities are low, very few people decide to continue on the research track
when having more attractive opportunities in the industry, and there is a
significant “brain drain” affecting the overall availability of qualified
workers in the sector.
Reforms have been going on in Latvia's
education system for several years now. Unfortunately, most of these are
geared toward restructuring the old system and little has been done to change
the content of teaching to meet the current needs. This trend is reflected
in university study programs: those studying in bachelor's and master's programs
are being oriented toward narrow areas of science, as opposed to understanding
the separate sectors in the context of modern science.
Communications skills and proficiency in the use of new information technologies
are much more significant in the new educational system than they were during
the Soviet period12. Part of the Informatics
program involves increasing computer and Internet access in schools. In
1996, there was one computer per 101 students, and in 1998, that number was up
to 1 computer per 45 students. However, approximately 20% of these
computers are low-powered old models that cannot be fully, if at all, used in
the learning process. On September 1, 1998, 15% of all schools had access
to the Internet12, and this had grown to approximately 45% by
2000.
According
to Contreras and Kasesmaa, there
would be a positive reaction to a government policy that restructures the
spending on education in
general.
There have been some, not very coordinated efforts, like cash grants for
training local people at local universities. The government has been increasing
recently the financing of IT education programs at the Latvian University and
the Technical University in response to the
demand
from the market. Despite the above-described positive steps, more important than
anything else is the need to solve the general view in the society of the
government that is trying to exploit the problems and to serve their own
interests rather than solving them2.
There are relatively few experienced systems
analysts, project managers, technical writers and IT consultants, with some
disparity between what the universities teach and industry demands.
Latvian software developers are working with companies like IBM, Siemens, Unisys
and large banks on IT development projects. A number of global software and
technology firms including Lotus, Oracle, Microsoft and IBM are assisting the
Latvian government in developing training programs to meet the demand18.
In addition, the Business Advisory Council has proposed the following, "Institutes
for applied education and training in ICT related subjects in Russia, Poland,
Estonia, Latvia and Lithuania"19:
Aim:
-
To give a graduate level education and training in applied ICT
related subjects. This education should be on a highly qualified level. The
term "applied" indicates that the traditional academic approach is
somewhat reduced. The institutes should not primarily aim at examining
students with an aptitude for academic research, but the students should -
upon the completion of their courses - be able to contribute in the
development process of ICT subjects in commercial companies and government
entities.
-
To help extending the "ICT clusters" of the western part
of Baltic Sea Region beyond their present geographical confinement and thus
contribute to building ICT related businesses in St Petersburg, Kaliningrad
and the candidate countries in the Baltic Sea Region.
-
The institutes sh ould in their programs cover the technical as
well as the "softer" aspects of ICT. The programs should cover 1-2
years of studies. Possibly there can also be part time education.
Relationship
with business communities:
-
Business,
local as well as large international companies, would be invited to become
partners in the institutes. They would be able to contribute by helping
setting up programs that can give the students relevant skills and
knowledge. They can also help by providing lecturers.
-
Business could benefit considerably from the institutes. Not only will
they have the opportunity to influence the curriculum, they can also offer
internships. By providing a kind of "on-job-training" to
graduates from the institutes they can be able to recruit potentially
valuable staff members
-
Companies would also be able to help to select students, and - provided
that the applicants from the firm's staff meet the admittance criteria - a
quota could be reserved for such employees.
-
Companies' involvement should be made against an intention to establish
themselves or otherwise support development of local ICT related business.
-
Furthermore it would be very valuable if companies that decide to engage
themselves in the institutes could provide help by easing the burden of the
continuous upgrading of hard- and software for computers.
Organizational
matters:
-
Existing
universities in Russia, Poland, Estonia, Latvia and Lithuania with the best
undergraduate ICT programs should be offered to host the new institute´s
different programs in ICT related areas. The universities should provide the
physical and administrative infrastructure as well as contributing with
lecturers and experts.
-
Universities in the Nordic counties and Germany should also be asked to
contribute with their expertise and
-
The institutes should be governed by boards where the business
representatives make up half the members.
-
The institutes should be partly funded by deferred student fees, made
payable a couple of years after completion of the education.
-
Students
that are not successful in finding well paid positions should not have to
repay the full amount.
-
EU should provide additional funding. That funding should however
be gradually phased out.
-
Institutes should cooperate with universities in the rest of EU and
elsewhere and also participate in exchange programmes.
Advantages:
-
Individual institutes in the different
countries can operate in a common framework, thus increasing the image of
each other and also provide a quality assurance by peer review.
-
Aiming at the needs of companies
-
Establishing links between practitioners of ICT in the concerned
countries.
-
Counteracting a pull factor that can cause "brain-drain" by
offering promising individuals a good education in their home countries.
-
Supporting the national governments endeavours in e-government by
providing well-educated graduates that can work with advanced e-government
applications.
BAC
believes that this could form a basis for further thinking concerning
initiatives on ICT education
in the scope of the Northern Dimension.
Another important issue in the development of
Latvia's IT labor market is that of the English language. During the 1990s
there was also an increase in the number of students who want to learn English,
while the number of students wanting to learn Russian has declined. In the
1998/99 school year, 63% of students were acquiring English language
skills. Although learning English is growing in popularity nation-wide,
Latvia is a small country that has withstood tremendous pressure while
maintaining its cultural identity and preserving its language. The influx
of "English" words into the Latvian language shows the growing trend
toward globalization, while Latvian language is being used with increasing
frequency on Internet home pages12. Latvia will need to
maintain a fine balance between implementing policies to preserving its language
and allowing itself access to the global marketplace through increased use of
English.
Meanwhile, the population in Latvia is shrinking.
Among other demographic issues, it is suffering from a "brain drain"
as scientists and specialists leave the country to work abroad and, eventually,
emigrating. It is equally undesirable to have scientists and professionals
moving to work that requires a lower qualification level in other economic
sectors, which do not have a sufficientley large potential for innovative
development. This is exactly what has happened to a large extent inLatvia
since 1991 with human resources in research and technological development, whose
numbers have decreased seven times; in 1998 there were only 4,437 full time
equivalent employees. There were 1,526 scientists with PhDs. In
Latvia only 2 people per 1000 inhabitants work in the are of research and
development, while that number is 8 in the United States12.
Unfortunately, there has been a sharp rise in
unemployment in all of Latvia since 1992, and a new decline took root in 1998 in
connection with the Russian economic crisis. There has been a troubling
trend in that the ratio of inhabitants who are of working age and those who are
economically active inhabitants has declined, as a result of "discouraged
workers" who are unable to find work and give up, removing themselves from
economic life and having a devastating effect on family welfare and self-esteem12.
In addition, there is a discrepancy between the officially registered level of
unemployment and the actual level, which is higher. For example, in May
2000, 14% of economically active inhabitants were looking for work, but only
10.4% were officially registered4. However, unemployment shows large regional differences. The eastern parts
of Latvia are particularly affected, with unemployment rates around 20%. In
one small rural town in the Kurzeme region of Latvia, the local government
considers its actual level of unemployment as high as 84%, when accounting for
discouraged workers and subsistence farmers.
Presently Latvia’s Labor Law is being
discussed in the Latvian Parliament. The present draft is viewed negatively by
foreign investors.5 A
pro-business labor law will encourage investment in Latvia, create jobs and
increase the competitiveness of the labor market. It
was recommended by the U.S. State Department that Latvia needs to adopt the most
pro-business labor law in Europe to distinguish itself among all the potential
investment locations and make Latvia a destination for target industries5.